Foolproof consumer defence impossible’
By
SARONA IOSEFA
Totally protecting the weak, ill-informed, or stupid from credit problems was impossible, the general manager of the United Building Society, Mr Tony Kunowski, told a public forum yesterday. He was one of three speakers invited by the Ministry of Consumer Affairs to comment on the Ministry’s recently released discussion paper on consumers and credit. Mr Kunowski said he accepted that documents for consumers must be written in simple English, but other proposals in the consumers and credit paper were like “using a sledge hammer to crack a nut.” Mr Kunowski urged the Government to “educate rather than regulate.” It had underestimated the influence of market forces which forced financial institutions to “get their act together.” Mr Kunowski said to
regulate in order to protect would merely add another regulation to an already over-legislated society. There were so many different types of interest rates that it would be misleading rather than informative if lending institutions revealed all fixed costs in advertising. “It is not always a simple matter to explain the interest rates in advertising because they can vary.” He said he realised ethnic minorities were usually the most disadvantaged of consumers, but educating such groups would be more helpful than legislating. The United Building Society would be willing to sponsor such programmes. The co-ordinator of the Christchurch Community Law Centre, Mr Bob Hillier, challenged Mr Kunowski’s views on education in his address.
Mr Hillier was critical that the main thrust of financial institutions’ advertising was to seduce buyers into using credit and not to inform. “The nearest most finance-house advertisements come to alluding to disadvantages is when they say loans will be given to ‘approved’ customers,” Mr Hillier said. “There is never any mention of repossession or the consequences of default,” he said. Mr Hillier said the education system and lending institutions fell short of their obligations to inform consumers properly about credit. He applauded the consumers and credit paper as a positive step towards providing some “comeback” for the consumer. The forum was attended by about 30 people. Another speaker was Mr Stuart Walker, of Dunedin, a commercial lawyer and law lecturer.
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Press, 12 October 1988, Page 9
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360Foolproof consumer defence impossible’ Press, 12 October 1988, Page 9
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